Week in Review Archive

The Turkish government has struggled to tame inflation for the past year. Inflation sits at 70% despite an interest rate of 50% from Turkey’s central bank. Why it matters: Turkey may be forced to sacrifice economic growth as it tries to lower inflation.

A long-running domestic political battle over controversial judicial reforms receded into irrelevance on October 7, the date on which Hamas militants based in the Gaza Strip launched a coordinated assault on mostly civilian targets inside Israel that resulted in more than 1,100 deaths and the capture of more than 250 hostages. Under the direction of a special war Cabinet that includes Benny Gantz, a former head of the IDF and the leader of the opposition National Unity, which joined an expanded emergency government, Israel initiated a scorched-earth ground invasion inside Gaza in late October.

Dislocations from the pandemic, geoeconomic fragmentation, and Russia’s war in Ukraine have shifted world trade dynamics. While this has created challenges, the redirection of trade has also generated new opportunities, particularly for the Caucasus and Central Asia.

Despite higher interest rates, the Canadian economy is exceeding expectations and has dodged the predicted 2023 recession. Real GDP at basic prices grew 0.6% in January (7.4% annualized), and preliminary estimates pointed to 0.4% growth in February (4.9% annualized). This suggests that growth in the first quarter of 2024 is on track for around 3.5%, according to data from Statistics Canada.

The outlook for Asia and the Pacific in 2024 has brightened: we now expect that the region’s economy will slow less than we previously projected as inflation pressures continue to dissipate.

Economic growth in France is less than expected for this year with weaker consumer spending and investments, according to the central bank’s recent forecast. The European Commission cut its 2024 GDP growth forecast from 1.2% to 0.9%—as French manufacturing worsened toward the year-end of 2023.

A general election held in July 2023 resulted in a significant seat gain for the main opposition PP and fewer losses than expected for the member parties of the incumbent minority government headed by Prime Minister Pedro Sánchez. However, neither the center-right PP nor Sánchez’s center-left PSOE won enough seats to claim a majority and a lack of parliamentary allies doomed PP leader Alberto Feijóo’s efforts to secure confirmation of a minority government to failure.

Javier Milei, a self-described “anarcho-capitalist,” campaigned for the presidency on a platform that featured pledges to slash state spending, shrink the government, dismantle regulatory constraints on the private sector, and wage war against a corrupt political “caste” that had mismanaged Argentina into a seemingly endless series of economic crises.